Australian rules

An apple a day? Tell that to His Majesty Bhumibol Adulyadej (Rama IX) the King of Thailand, who recently hit on the ideal prescription for keeping the physician at bay; a couple of daily glasses of red wine. This leaves the Thai king's subjects with some catching up to do. Average Thai consumption - a quarter of a glass per annum - currently puts Thailand bottom of the world league table. "We could sell all our wine to Thailand at double the price it fetches in the UK," says David Birch, marketing director of BRL-Hardy, Australia's second biggest wine company.

China, like Thailand, is getting in on the health act and Australian wine is set to cash in here, too. Late last year, in an official edict, Li Peng, the Chinese leader, recommended red wine to the Chinese people - second bottom in the league table - on health grounds. Communist Party members are reported to have forsaken the traditional toast in cognac or Mao Tai - China's grain-based spirit - in favour of red wine. The effect, as they say, is shattering. In a single month, Australian red wine exports to China exceeded the previous total for the entire year.

With a shortfall of red wine in California, Americans, too, who don't think twice about paying $15 (pounds 8) for a decent bottle of red wine, are looking longingly towards Australia. "California is a massive market all of a sudden," says John Ratcliffe at Seagram - the wine and spirits giant which owns Oddbins. Not surprisingly, Southcorp, Australia's largest producer, is rubbing its hands with glee at America's belated discovery of Australian wine in general and Penfolds in particular. Penfolds's Grange Hermitage is at Chateau Lafite price levels and climbing.

It would be reassuring to think that events in California and Asia have little bearing on what goes on in the UK high street. With wines from Bulgaria to Brazil, Uruguay to Umbria, does the UK not have the most diverse market in the world with the most discriminating consumers? Yes, but try convincing an Australian wine producer that the grass, not to mention the dollar, is not looking greener elsewhere. As John Ratcliffe puts it: "Apart from the exchange rate, a lot of things are conspiring against the consumer here at the moment. If you're an international producer, you don't really need to think of the UK any more."

The globalisation of wine fits neatly in with Australia's ambitious plans, if not to conquer the world, at least to have grabbed a sizeable slice of the market by 2025. Never mind the fact that wine consumption in traditional wine-producing countries is plummeting. The insatiable thirst of America and Germany, along with South-east Asia's recent espousal of red wine, all feed Australia's aggressive long-term strategy to become a major world wine power.

The 2025 target - upping exports from 14 million to 67 million cases - requires a bold commitment to vineyard expansion. As quickly as the growers of southern Europe are pulling out their vines, Australian producers aim to virtually double wine production by sticking 40,000 hectares of the most popular grape varieties in the ground every year. Most of it comes from shiraz, cabernet sauvignon and chardonnay, resulting in a significant shift from basic to premium wines.

Already, the new plantings of white grapes are helping to restore Australia's slightly battered image as a value for money producer. But the reds will take longer to catch up. And despite the record 1986 harvest, the red wines from the two preceding smaller vintages, including the drought year of 1995, are only now coming on stream. It's hardly surprising, then, that this dearth, coupled with the demand for red wines, is helping jack up the prices.

In the high street, Aussie reds at between pounds 4 and pounds 6 are going up - some already have - on average between 50p and pounds 1. At higher price levels, well-known brands are shooting up. Penfolds' excellent Bin 389, for instance, has shot over the pounds 10 barrier to pounds 11.99. So has St Hallett's cult Barossa Valley Shiraz. Old Block. The price increases of top reds are shocking. Talk is of Penfolds Bin 707, for instance, already up from pounds 16.99 to pounds 24.99 for the 1993 vintage, rising another pounds 10 for the 1994 vintage. The 1993 Thomas Hardy Coonawarra Cabernet Sauvignon will soar from its 1992 price of pounds 12.99 to pounds 18.99.

Are the price rises justified? "We wouldn't put the prices up if we didn't think the wines were worth it," says BRL-Hardy's David Birch. "If you were to taste them blind, you'd have to say they're worth the money," agrees John Ratcliffe. But Anne-Marie Bostock, who buys Tesco's extensive Australian range warns that price rises still need to represent good value for the consumer. "I expect the next couple of years will be tough. There's a lot of loyalty towards Australia and it has so much to offer. But if we think there's an increase which is not justified, we won't accept it."

By shifting its basic prices upwards, Australia has already signalled its intention to concentrate on satisfying wine drinkers prepared to pay the extra for quality rather than newcomers who draw the line at pounds 3. But with the UK still its biggest and most loyal export market by some distance, Australia needs to be careful not to overdo its price rises if it is to avoid losing valued customers. Then again, it would only take the Chinese drinking three-quarters of a bottle each per annum to swallow up Australia's entire projected export target for 2025.

Australian Wines of the Week

1995 Amberley Estate Semillon, Margaret River, pounds 9.99, Thresher, Wine Rack, Bottoms Up, Classy, barrel-fermented Western Australian semillon with subtle oak, textured, peachy richness and stonefruit characters. 1996 Yaldara Reserve Grenache, Whitmore Old Vineyard, pounds 5.99. Waitrose. Vibrant, purple-hued, spicy mulberry-like old vine grenache - like a young Gignondas with attitude. 1994 Peter Lehmann Cabernet Sauvignon, Barossa valley, pounds 6.99, Oddbins, pounds 7.49, Safeway. Strappingly rich, smoky cabernet sauvignon with vanilla and oasis overtones. 1994 Charles Cimicky Cabernet Franc, Barossa Valley, pounds 8.95, Justerini & Brooks, London SW1 (0171-493 8721). Tarry oak aromas and a richly flavoured, vanilla-tinged fruitiness characterise this distinctive Barossa Valley cabernet franc. 1994 Chateau Reynella Basket Pressed McLaren Vale Shiraz, pounds 7.99, Waitrose, Asda. Aromatic, cinnamon and pepper-tinged basket case from Hardies with intense spice, black fruit flavours and firm backbone. 1993 St Hallett Old Block Shiraz, pounds 11.99, selected Tescos. The latest chip off the Old Block lives up to expectations with it aromatic vanilla smokiness and restrained sweet chocolatey oak and sensuously spicy black fruits flavours